82 FR 61540 - In the Matter of: Saeid Yahya Charkhian, Villa 5, Street 1, Arabian Ranches, Dubai, United Arab Emirates, and Caspian Industrial Machinery Supply LLC, No. 2509 Churchill Executive Tower, Business Bay, Dubai, United Arab Emirates, Attention: Saeid Yahya Charkhian; Respondents; Order Relating to Saeid Yahya Charkhian and Caspian Industrial Machinery Supply LLC

DEPARTMENT OF COMMERCE
Bureau of Industry and Security

Federal Register Volume 82, Issue 248 (December 28, 2017)

Page Range		61540-61542
FR Document		2017-28112
Federal Register, Volume 82 Issue 248 (Thursday, December 28, 2017)
[Federal Register Volume 82, Number 248 (Thursday, December 28, 2017)]
[Notices]
[Pages 61540-61542]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-28112]


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 DEPARTMENT OF COMMERCE

Bureau of Industry and Security

[17-BIS-0002]


In the Matter of: Saeid Yahya Charkhian, Villa 5, Street 1, 
Arabian Ranches, Dubai, United Arab Emirates, and Caspian Industrial 
Machinery Supply LLC, No. 2509 Churchill Executive Tower, Business Bay, 
Dubai, United Arab Emirates, Attention: Saeid Yahya Charkhian; 
Respondents; Order Relating to Saeid Yahya Charkhian and Caspian 
Industrial Machinery Supply LLC

    The Bureau of Industry and Security, U.S. Department of Commerce 
(``BIS''), has notified Saeid Yahya Charkhian, of Dubai, United Arab 
Emirates (``Charkhian''), and Caspian Industrial Machinery Supply LLC 
of Dubai, United Arab Emirates (``Caspian'') (collectively the 
``Respondents''), that it has initiated an administrative proceeding 
against Respondents pursuant to Section 766.3 of the Export 
Administration Regulations (the ``Regulations''),\1\ and Section 13(c) 
of the Export Administration Act of 1979, as amended (the ``Act''),\2\ 
through the issuance of a Charging Letter to Respondents that allege 
that Charkhian committed four (4) violations of the Regulations and 
Caspian committed three (3) violations of the Regulations. 
Specifically, the charges are:
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    \1\ The Regulations are currently codified in the Code of 
Federal Regulations at 15 CFR parts 730-774 (2017). The violations 
alleged occurred in 2012-2013. The Regulations governing the 
violations at issue are found in the 2012-2013 version of the Code 
of Federal Regulations, 15 CFR parts 730-774 (2012-2013). The 2017 
Regulations govern the procedural aspects of this case.
    \2\ 50 U.S.C. 4601-4623 (Supp. III 2015). Since August 21, 2001, 
the Act has been in lapse and the President, through Executive Order 
13222 of August 17, 2001 (3 CFR, 2001 Comp. 783 (2002)), which has 
been extended by successive Presidential Notices, the most recent 
being that of August 15, 2017 (82 FR 39005 (Aug. 16, 2017)), has 
continued the Regulations in effect under the International 
Emergency Economic Powers Act (50 U.S.C. 1701, et seq.) (2012).
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    As to both Charkhian and Caspian:

Charges 1-3 15 CFR 764.2(e)--Acting With Knowledge

    1. On at least three occasions between on or about March 27, 
2012, and on or about October 5, 2013, Charkhian and Caspian 
(collectively, the ``Respondents'') transferred,

[[Page 61541]]

forwarded, ordered, bought and/or sold items subject to the 
Regulations and exported or to be exported from the United States to 
Iran, via the Netherlands and the United Arab Emirates (``UAE''), 
with knowledge \3\ that a violation of the Regulations had occurred 
or was about or intended to occur in connection with the items. 
Specifically, the Respondents acted with knowledge of a violation of 
the Regulations when they sold, transferred and/or forwarded to, 
and/or ordered or bought for, end users in Iran items that the 
Respondents procured from the United States through an intermediary 
company located in the Netherlands. These U.S.-origin items, 
including masking wax, lithium batteries, and zirconia crucibles, 
were designated EAR99 under the Regulations \4\ and valued in total 
at nearly $190,000.
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    \3\ Title 15 CFR 772.1 defines ``knowledge'' as ``[k]nowledge of 
a circumstance (the term may be a variant, such as ``know,'' 
``reason to know,'' or ``reason to believe'') includes not only 
positive knowledge that the circumstance exists or is substantially 
certain to occur, but also an awareness of a high probability of its 
existence or future occurrence. Such awareness is inferred from 
evidence of the conscious disregard of facts known to a person and 
is also inferred from a person's willful avoidance of facts.
    \4\ ``EAR99'' is a designation for items subject to the 
Regulations but not listed on the Commerce Control List. 15 CFR 
734.3(c).
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    2. The Respondents' actions violated the long-standing and 
widely-known U.S. embargo against Iran. Under Section 746.7 of the 
Regulations, BIS prohibits the export or reexport to Iran of any 
item subject to both the Regulations and the Iranian Transactions 
and Sanctions Regulations (``ITSR''), if the transaction is 
prohibited by the ITSR and has not been authorized by the U.S. 
Department of the Treasury's Office of Foreign Assets Control 
(``OFAC''), which administers the ITSR.\5\ At all times pertinent 
hereto, the ITSR prohibited, inter alia, the unauthorized 
exportation, reexportation, sale or supply, directly or indirectly, 
from the United States to Iran of any goods, technology, or 
services. This broad prohibition included restrictions on the 
exportation, reexportation, sale or supply of any goods, technology, 
or services from the United States to a third country, such as the 
Netherlands or the UAE, undertaken with knowledge or reason to know 
that they were intended for supply, transshipment, or reexportation, 
directly or indirectly, to Iran. 31 CFR 560.204. As set further 
below, the Respondents knew that the items at issue were ultimately 
destined for Iran and they knew of the U.S. embargo against Iran, 
but they did not seek or obtain the required U.S. Government 
authorizations in connection with any of the exports or reexports 
described herein.
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    \5\ 31 CFR part 560 (2012-2013). The ITSR formerly were known as 
the Iranian Transactions Regulations (``ITR''). On October 22, 2012, 
OFAC renamed the ITR as the ITSR and reissued them in relevant part. 
See 77 FR 64664 (Oct. 22, 2012).
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    3. Charkhian, an Iranian national, personally participated in 
each of the transactions at issue and, in addition, was Managing 
Director and part owner of Caspian, a UAE trading company, at all 
times pertinent hereto. Upon information and belief, Charkhian has, 
in fact, been Managing Director of Caspian since in or about May 
2001, when Caspian was formed in the UAE. Through the Respondents' 
many years of business in the UAE, they were aware of the U.S. 
embargo against Iran at the times of the transactions at issue in 
2012-2013. Moreover, the Respondents had specifically acknowledged 
the existence of the embargo, for example, when they completed an 
end-user agreement with a European subsidiary of a U.S. company that 
included statements related to the need for compliance with ``U.S. 
Export Administration Regulations.''
    4. Despite this knowledge, the Respondents sought to procure for 
and supply to customers in Iran U.S.-origin items without the 
required U.S. Government authorization and did so through 
transactions that they structured to conceal from U.S. suppliers the 
Respondents' actual role in the transactions and that the items were 
ultimately destined for Iran. On or about March 27, 2012, the 
Respondents transferred or forwarded masking wax, an item subject to 
the Regulations and the ITSR and valued at $2,570, from the UAE to 
Iran without the required U.S. Government authorization. The events 
leading to this knowing violation began in or about November 2011, 
when the Respondents received an inquiry from an Iranian entity 
seeking masking wax, a protective, strippable coating used in 
electroplating, for capping ends of tubing, and for sealing the ends 
of electric cables. The Respondents provided the request to a 
company in the Netherlands, which indicated that it ``only [had a] 
source in USA for this product'' but that the product was ``on stock 
in the U.S.'' and could be delivered in about two weeks. The 
Respondents' Iranian customer Mavadkaran Jahed Noavar Company 
(``Mavadkaran''), which is part of the Iran-based conglomerate the 
MAPNA Group, subsequently issued a purchase order on or about 
February 13, 2012, to the Respondents for 100 lbs. of masking wax, 
which the Respondents then purchased from the United States through 
the Dutch reseller. Payment information indicates that the 
Respondents sold the items to Mavadkaran on or about February 21, 
2012. The items were exported from the United States on or about 
February 23, 2012. After arriving in the Netherlands, the items were 
transshipped on or about March 14, 2012, to the Respondents in the 
UAE. On or about March 27, 2012, the Respondents then transferred or 
forwarded the items to Iran.
    5. On a second occasion, between in or about July 2012, and in 
or about October 2012, the Respondents similarly ordered and bought 
lithium batteries from the United States through the same Dutch 
intermediary company and then sold, transferred and/or forwarded the 
batteries to an end user in Iran. The lithium batteries were subject 
to the Regulations and the ITSR and were valued in total at $75,000. 
In or about January 2012, the Respondents had asked the Dutch 
company to provide a quote for six orders of 1,000 batteries which 
the Respondents' customer had tested and sought for a pending 
project in Iran. After receiving pricing information from the Dutch 
company, the Respondents bought or ordered the 1,000 lithium 
batteries on or about July 15, 2012, which was followed by a pro 
forma invoice from the Dutch company to the Respondents for the 
1,000 batteries about one month later. On or about October 3, 2012, 
the U.S. supplier, which had not been informed that the items were 
to be transshipped to Iran, filed an Automated Export System 
(``AES'') record indicating that 1,000 lithium batteries were being 
exported from the United States for the ultimate destination of the 
Netherlands. As part of email correspondence between on or about 
October 15-17, 2012, following the transshipment of the items from 
the Netherlands to the Respondents in the UAE, the Dutch company 
provided the Respondents a certificate of origin from the U.S. 
company confirming the items were of U.S.-origin, as well as an 
invoice identifying the items as manufactured in the United States. 
A Caspian invoice and packing list dated October 17, 2012, indicated 
that the Respondents were selling, transferring and/or forwarding 
1,000 lithium batteries to a buyer in Tehran, Iran, that was related 
to the Iran National Oil Company \6\ and Iran National Drilling 
Company,\7\ both of which are Iranian-Government owned corporations. 
The invoice also confirmed that the items were of U.S.-origin. A few 
days later, in an email dated on or about October 29, 2012, an 
Iranian party confirmed that it had received the 1,000 lithium 
batteries from the Respondents.
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    \6\ Also known as National Iranian Oil Company or ``NIOC.'' NIOC 
was designated a Specially Designated National (``SDN'') by OFAC on 
December 4, 2008, but was removed from the SDN List on January 16, 
2016, as part of the Joint Comprehensive Plan of Action (``JCPOA'').
    \7\ Also known as the National Iranian Drilling Company or 
``NIDC.''
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    6. Finally, on a third occasion, between in or about August 
2013, and in or about October 2013, the Respondents ordered and 
bought approximately 196 flat bottom zirconia crucibles from the 
United States through the same Dutch intermediary company and then 
sold, transferred or forwarded the crucibles to an end user in Iran. 
The crucibles are subject to the Regulations and the ITSR, can be 
used in nuclear material casting, such as casting uranium, and were 
valued at $112,000. The events leading up to this knowing violation 
began when the Respondents received an order request from Iranian 
company Mavadkaran on or about April 23, 2013. Mavadkaran requested 
that the purchase order be issued to Mapna International F.Z.E. 
(``Mapna''), a related company in the UAE, which was listed as the 
buyer instead of Mavadkaran. The Respondents' pro forma invoice 
dated April 23, 2013, indicated that the items would be of U.S.-
origin. On or about May 9, 2013, the Respondents forwarded the order 
request to the Dutch company, and approximately one week later the 
Respondents received a price quote for the items. On or about June 
3, 2013, Mapna issued a purchase order to the Respondents stating 
that the items were to be delivered by vessel to Iran and that the 
Respondents should provide a certification of origin confirming the 
items were of U.S.-origin, certified by the local chamber of 
commerce. After the Dutch company placed a

[[Page 61542]]

corresponding order with a U.S. supplier at the Respondents' 
request, the zirconia crucibles were exported from the United States 
to the Netherlands on or about August 20, 2013. The Dutch company 
transshipped the items to the UAE on or about September 17, 2013. An 
email dated on or about October 5, 2013, from Charkhian to a customs 
broker indicated that the Respondents had forwarded or transferred 
the items for delivery to Iran.
    7. In so doing, the Respondents committed three (3) violations 
of Section 764.2(e) of the Regulations and are jointly and severally 
liable for those violations.

    As to Charkhian only:

Charge 4 15 CFR 764.2(g)--False or Misleading Statement

    8. On or about December 16, 2014, Charkhian made a false or 
misleading statement to BIS and other U.S. Government officials in 
connection with an action subject to the Regulations and/or in 
connection with effecting an export, reexport or other activity 
subject to the Regulations. While being interviewed by BIS on that 
date as part of a post-shipment verification (unrelated to Charges 
1-3 above), Charkhian represented that he had never conducted any 
business with Iran at any time since 2001, and had not purchased 
anything from the United States during that time period. These 
statements contradicted the transactions and related transaction 
documents and correspondence detailed in Charges 1-3 above, which 
clearly indicate that at least on three occasions during 2012-2013, 
Charkhian and his company, Caspian, knowingly procured items from 
the United States or of U.S.-origin for Iranian customers through an 
intermediary party in the Netherlands.
    9. Pursuant to Section 764.2(g) of the Regulations, no person 
may make any false or misleading representation or statement, or 
falsify or conceal any material fact, either directly or indirectly 
to BIS or any official of any other U.S. Government agency in 
connection with an action subject to the Regulations as set forth in 
(g)(1)(i) or in connection with effecting an export, reexport or 
other activity subject to the Regulations as set forth in 
(g)(1)(iii).
    10. In so doing, Charkhian committed one (1) violation of 
Section 764.2(g) of the Regulations.

    Whereas, BIS and Respondents have entered into a Settlement 
Agreement pursuant to Section 766.18(b) of the Regulations, whereby 
they agreed to settle this matter in accordance with the terms and 
conditions set forth therein; and
    Whereas, I have approved of the terms of such Settlement Agreement; 
it is therefore ordered:
    FIRST, that for a period of twelve (12) years from the date of this 
Order, Saeid Yahya Charkhian, with a last known address of Villa 5, 
Street 1, Arabian Ranches, Dubai, United Arab Emirates, and Caspian 
Industrial Machinery Supply LLC, No. 2509 Churchill Executive Tower, 
Business Bay, Dubai, United Arab Emirates, and when acting for or on 
their behalf, their successors, assigns, directors, officers, 
employees, representatives, or agents (each a ``Denied Person'' and 
collectively the ``Denied Persons''), may not, directly or indirectly, 
participate in any way in any transaction involving any commodity, 
software or technology (hereinafter collectively referred to as 
``item'') exported or to be exported from the United States that is 
subject to the Regulations, or in any other activity subject to the 
Regulations, including, but not limited to:
    A. Applying for, obtaining, or using any license, license 
exception, or export control document;
    B. Carrying on negotiations concerning, or ordering, buying, 
receiving, using, selling, delivering, storing, disposing of, 
forwarding, transporting, financing, or otherwise servicing in any way, 
any transaction involving any item exported or to be exported from the 
United States that is subject to the Regulations, or engaging in any 
other activity subject to the Regulations; or
    C. Benefitting in any way from any transaction involving any item 
exported or to be exported from the United States that is subject to 
the Regulations, or from any other activity subject to the Regulations.
    SECOND, that no person may, directly or indirectly, do any of the 
following:
    A. Export or reexport to or on behalf of a Denied Person any item 
subject to the Regulations;
    B. Take any action that facilitates the acquisition or attempted 
acquisition by a Denied Person of the ownership, possession, or control 
of any item subject to the Regulations that has been or will be 
exported from the United States, including financing or other support 
activities related to a transaction whereby a Denied Person acquires or 
attempts to acquire such ownership, possession or control;
    C. Take any action to acquire from or to facilitate the acquisition 
or attempted acquisition from a Denied Person of any item subject to 
the Regulations that has been exported from the United States;
    D. Obtain from a Denied Person in the United States any item 
subject to the Regulations with knowledge or reason to know that the 
item will be, or is intended to be, exported from the United States; or
    E. Engage in any transaction to service any item subject to the 
Regulations that has been or will be exported from the United States 
and which is owned, possessed or controlled by a Denied Person, or 
service any item, of whatever origin, that is owned, possessed or 
controlled by a Denied Person if such service involves the use of any 
item subject to the Regulations that has been or will be exported from 
the United States. For purposes of this paragraph, servicing means 
installation, maintenance, repair, modification or testing.
    THIRD, that, after notice and opportunity for comment as provided 
in Section 766.23 of the Regulations, any person, firm, corporation, or 
business organization related to a Denied Person by affiliation, 
ownership, control, or position of responsibility in the conduct of 
trade or related services may also be made subject to the provisions of 
the Order.
    FOURTH, all licenses issued pursuant to the Act or Regulations in 
which any of the Respondents had an interest as of the date of this 
Order are revoked.
    FIFTH, Respondents shall not take any action or make or permit to 
be made any public statement, directly or indirectly, denying the 
allegations in the Charging Letter or the Order. The foregoing does not 
affect Respondents' testimonial obligations in any proceeding, nor does 
it affect its right to take legal or factual positions in civil 
litigation or other civil proceedings in which the U.S. Department of 
Commerce is not a party.
    SIXTH, that the Charging Letter, the Settlement Agreement, and this 
Order shall be made available to the public.
    SEVENTH, that this Order shall be served on Respondents, and shall 
be published in the Federal Register.
    This Order, which constitutes the final agency action in this 
matter, is effective immediately.

    Issued this 21st day of December, 2017.
Richard R. Majauskas,
Deputy Assistant Secretary of Commerce for Export Enforcement 
performing the non-exclusive functions and duties of the Assistant 
Secretary of Commerce for Export Enforcement.
[FR Doc. 2017-28112 Filed 12-27-17; 8:45 am]
 BILLING CODE P
61540 Federal Register / Vol. 82, No. 248 / Thursday, December 28, 2017 / Notices

addition, Section 750.8 of the Second, no person may, directly or Issued this 19th day of December 2017.
Regulations states that the Bureau of indirectly, do any of the following: Karen H. Nies-Vogel,
Industry and Security’s Office of A. Export or reexport to or on behalf Director, Office of Exporter Services.
Exporter Services may revoke any of the Denied Person any item subject to [FR Doc. 2017–28004 Filed 12–27–17; 8:45 am]
Bureau of Industry and Security (‘‘BIS’’) the Regulations; BILLING CODE P
licenses previously issued pursuant to B. Take any action that facilitates the
the Export Administration Act (‘‘EAA’’ acquisition or attempted acquisition by
or ‘‘the Act’’), or pursuant to the the Denied Person of the ownership, DEPARTMENT OF COMMERCE
Regulations in which the person had an possession, or control of any item
interest at the time of his/her subject to the Regulations that has been Bureau of Industry and Security
conviction. or will be exported from the United [17–BIS–0002]
BIS has received notice of Faal’s States, including financing or other
conviction for violating Section 38 of support activities related to a In the Matter of: Saeid Yahya
the AECA, and has provided notice and transaction whereby the Denied Person Charkhian, Villa 5, Street 1, Arabian
an opportunity for Faal to make a acquires or attempts to acquire such Ranches, Dubai, United Arab Emirates,
written submission to BIS, as provided ownership, possession or control; and Caspian Industrial Machinery
in Section 766.25 of the Regulations. C. Take any action to acquire from or Supply LLC, No. 2509 Churchill
BIS has not received a submission from to facilitate the acquisition or attempted Executive Tower, Business Bay, Dubai,
Faal. acquisition from the Denied Person of United Arab Emirates, Attention: Saeid
Based upon my review and any item subject to the Regulations that Yahya Charkhian; Respondents; Order
consultations with BIS’s Office of has been exported from the United Relating to Saeid Yahya Charkhian and
Export Enforcement, including its States; Caspian Industrial Machinery Supply
Director, and the facts available to BIS, D. Obtain from the Denied Person in LLC
I have decided to deny Faal’s export the United States any item subject to the
privileges under the Regulations for a The Bureau of Industry and Security,
Regulations with knowledge or reason
period of ten (10) years from the date of U.S. Department of Commerce (‘‘BIS’’),
to know that the item will be, or is
Faal’s conviction. I have also decided to has notified Saeid Yahya Charkhian, of
intended to be, exported from the
revoke all licenses issued pursuant to Dubai, United Arab Emirates
United States; or
the Act or Regulations in which Faal (‘‘Charkhian’’), and Caspian Industrial
E. Engage in any transaction to service
had an interest at the time of his Machinery Supply LLC of Dubai, United
any item subject to the Regulations that
conviction. Arab Emirates (‘‘Caspian’’) (collectively
has been or will be exported from the
the ‘‘Respondents’’), that it has initiated
Accordingly, it is hereby ordered: United States and which is owned,
an administrative proceeding against
First, from the date of this Order until possessed or controlled by the Denied
Respondents pursuant to Section 766.3
May 12, 2026, Papa Faal, with a last Person, or service any item, of whatever
of the Export Administration
known address of 6308 Decatur Avenue origin, that is owned, possessed or
Regulations (the ‘‘Regulations’’),1 and
North, Brooklyn Park, MN 55428, and controlled by the Denied Person if such
Section 13(c) of the Export
when acting for or on his behalf, his service involves the use of any item
Administration Act of 1979, as amended
successors, assigns, employees, agents subject to the Regulations that has been
(the ‘‘Act’’),2 through the issuance of a
or representatives (‘‘the Denied or will be exported from the United
Charging Letter to Respondents that
Person’’), may not, directly or indirectly, States. For purposes of this paragraph,
allege that Charkhian committed four (4)
participate in any way in any servicing means installation,
violations of the Regulations and
transaction involving any commodity, maintenance, repair, modification or
Caspian committed three (3) violations
software or technology (hereinafter testing.
of the Regulations. Specifically, the
collectively referred to as ‘‘item’’) Third, after notice and opportunity for
charges are:
exported or to be exported from the comment as provided in Section 766.23 As to both Charkhian and Caspian:
United States that is subject to the of the Regulations, any other person,
Regulations, including, but not limited firm, corporation, or business Charges 1–3 15 CFR 764.2(e)—Acting
to: organization related to Faal by With Knowledge
A. Applying for, obtaining, or using ownership, control, position of
any license, license exception, or export responsibility, affiliation, or other 1. On at least three occasions between on
control document; connection in the conduct of trade or or about March 27, 2012, and on or about
October 5, 2013, Charkhian and Caspian
B. Carrying on negotiations business may also be made subject to (collectively, the ‘‘Respondents’’) transferred,
concerning, or ordering, buying, the provisions of this Order in order to
receiving, using, selling, delivering, prevent evasion of this Order. 1 The Regulations are currently codified in the
storing, disposing of, forwarding, Fourth, in accordance with Part 756 of Code of Federal Regulations at 15 CFR parts 730–
transporting, financing, or otherwise the Regulations, Faal may file an appeal 774 (2017). The violations alleged occurred in
servicing in any way, any transaction of this Order with the Under Secretary 2012–2013. The Regulations governing the
violations at issue are found in the 2012–2013
involving any item exported or to be of Commerce for Industry and Security. version of the Code of Federal Regulations, 15 CFR
exported from the United States that is The appeal must be filed within 45 days parts 730–774 (2012–2013). The 2017 Regulations
subject to the Regulations, or engaging from the date of this Order and must govern the procedural aspects of this case.
2 50 U.S.C. 4601–4623 (Supp. III 2015). Since
in any other activity subject to the comply with the provisions of Part 756
sradovich on DSK3GMQ082PROD with NOTICES

August 21, 2001, the Act has been in lapse and the
Regulations; or of the Regulations. President, through Executive Order 13222 of August
C. Benefitting in any way from any Fifth, a copy of this Order shall be 17, 2001 (3 CFR, 2001 Comp. 783 (2002)), which
transaction involving any item exported delivered to Faal and shall be published has been extended by successive Presidential
or to be exported from the United States in the Federal Register. Notices, the most recent being that of August 15,
2017 (82 FR 39005 (Aug. 16, 2017)), has continued
that is subject to the Regulations, or Sixth, this Order is effective the Regulations in effect under the International
from any other activity subject to the immediately and shall remain in effect Emergency Economic Powers Act (50 U.S.C. 1701,
Regulations. until May 12, 2026. et seq.) (2012).

VerDate Sep<11>2014 18:14 Dec 27, 2017 Jkt 244001 PO 00000 Frm 00008 Fmt 4703 Sfmt 4703 E:\FR\FM\28DEN1.SGM 28DEN1
Federal Register / Vol. 82, No. 248 / Thursday, December 28, 2017 / Notices 61541

forwarded, ordered, bought and/or sold items Director of Caspian since in or about May followed by a pro forma invoice from the
subject to the Regulations and exported or to 2001, when Caspian was formed in the UAE. Dutch company to the Respondents for the
be exported from the United States to Iran, Through the Respondents’ many years of 1,000 batteries about one month later. On or
via the Netherlands and the United Arab business in the UAE, they were aware of the about October 3, 2012, the U.S. supplier,
Emirates (‘‘UAE’’), with knowledge 3 that a U.S. embargo against Iran at the times of the which had not been informed that the items
violation of the Regulations had occurred or transactions at issue in 2012–2013. Moreover, were to be transshipped to Iran, filed an
was about or intended to occur in connection the Respondents had specifically Automated Export System (‘‘AES’’) record
with the items. Specifically, the Respondents acknowledged the existence of the embargo, indicating that 1,000 lithium batteries were
acted with knowledge of a violation of the for example, when they completed an end- being exported from the United States for the
Regulations when they sold, transferred and/ user agreement with a European subsidiary of ultimate destination of the Netherlands. As
or forwarded to, and/or ordered or bought a U.S. company that included statements part of email correspondence between on or
for, end users in Iran items that the related to the need for compliance with ‘‘U.S. about October 15–17, 2012, following the
Respondents procured from the United States Export Administration Regulations.’’ transshipment of the items from the
through an intermediary company located in 4. Despite this knowledge, the Respondents Netherlands to the Respondents in the UAE,
the Netherlands. These U.S.-origin items, sought to procure for and supply to the Dutch company provided the
including masking wax, lithium batteries, customers in Iran U.S.-origin items without Respondents a certificate of origin from the
and zirconia crucibles, were designated the required U.S. Government authorization U.S. company confirming the items were of
EAR99 under the Regulations 4 and valued in and did so through transactions that they U.S.-origin, as well as an invoice identifying
total at nearly $190,000. structured to conceal from U.S. suppliers the the items as manufactured in the United
2. The Respondents’ actions violated the Respondents’ actual role in the transactions States. A Caspian invoice and packing list
long-standing and widely-known U.S. and that the items were ultimately destined dated October 17, 2012, indicated that the
embargo against Iran. Under Section 746.7 of for Iran. On or about March 27, 2012, the Respondents were selling, transferring and/or
the Regulations, BIS prohibits the export or Respondents transferred or forwarded forwarding 1,000 lithium batteries to a buyer
reexport to Iran of any item subject to both masking wax, an item subject to the in Tehran, Iran, that was related to the Iran
the Regulations and the Iranian Transactions Regulations and the ITSR and valued at National Oil Company 6 and Iran National
and Sanctions Regulations (‘‘ITSR’’), if the $2,570, from the UAE to Iran without the Drilling Company,7 both of which are
transaction is prohibited by the ITSR and has required U.S. Government authorization. The Iranian-Government owned corporations.
not been authorized by the U.S. Department events leading to this knowing violation The invoice also confirmed that the items
of the Treasury’s Office of Foreign Assets began in or about November 2011, when the were of U.S.-origin. A few days later, in an
Control (‘‘OFAC’’), which administers the Respondents received an inquiry from an email dated on or about October 29, 2012, an
ITSR.5 At all times pertinent hereto, the ITSR Iranian entity seeking masking wax, a Iranian party confirmed that it had received
prohibited, inter alia, the unauthorized protective, strippable coating used in the 1,000 lithium batteries from the
exportation, reexportation, sale or supply, electroplating, for capping ends of tubing, Respondents.
directly or indirectly, from the United States and for sealing the ends of electric cables. 6. Finally, on a third occasion, between in
to Iran of any goods, technology, or services. The Respondents provided the request to a or about August 2013, and in or about
This broad prohibition included restrictions company in the Netherlands, which October 2013, the Respondents ordered and
on the exportation, reexportation, sale or indicated that it ‘‘only [had a] source in USA bought approximately 196 flat bottom
supply of any goods, technology, or services for this product’’ but that the product was zirconia crucibles from the United States
from the United States to a third country, ‘‘on stock in the U.S.’’ and could be delivered through the same Dutch intermediary
such as the Netherlands or the UAE, in about two weeks. The Respondents’ company and then sold, transferred or
undertaken with knowledge or reason to Iranian customer Mavadkaran Jahed Noavar forwarded the crucibles to an end user in
know that they were intended for supply, Company (‘‘Mavadkaran’’), which is part of Iran. The crucibles are subject to the
transshipment, or reexportation, directly or the Iran-based conglomerate the MAPNA Regulations and the ITSR, can be used in
indirectly, to Iran. 31 CFR 560.204. As set Group, subsequently issued a purchase order nuclear material casting, such as casting
further below, the Respondents knew that the on or about February 13, 2012, to the uranium, and were valued at $112,000. The
items at issue were ultimately destined for Respondents for 100 lbs. of masking wax, events leading up to this knowing violation
Iran and they knew of the U.S. embargo which the Respondents then purchased from began when the Respondents received an
against Iran, but they did not seek or obtain the United States through the Dutch reseller. order request from Iranian company
the required U.S. Government authorizations Payment information indicates that the Mavadkaran on or about April 23, 2013.
in connection with any of the exports or Respondents sold the items to Mavadkaran Mavadkaran requested that the purchase
reexports described herein. on or about February 21, 2012. The items order be issued to Mapna International F.Z.E.
3. Charkhian, an Iranian national, were exported from the United States on or (‘‘Mapna’’), a related company in the UAE,
personally participated in each of the about February 23, 2012. After arriving in the which was listed as the buyer instead of
transactions at issue and, in addition, was Netherlands, the items were transshipped on Mavadkaran. The Respondents’ pro forma
Managing Director and part owner of or about March 14, 2012, to the Respondents invoice dated April 23, 2013, indicated that
Caspian, a UAE trading company, at all times in the UAE. On or about March 27, 2012, the the items would be of U.S.-origin. On or
pertinent hereto. Upon information and Respondents then transferred or forwarded about May 9, 2013, the Respondents
belief, Charkhian has, in fact, been Managing the items to Iran. forwarded the order request to the Dutch
5. On a second occasion, between in or company, and approximately one week later
3 Title 15 CFR 772.1 defines ‘‘knowledge’’ as
about July 2012, and in or about October the Respondents received a price quote for
‘‘[k]nowledge of a circumstance (the term may be 2012, the Respondents similarly ordered and the items. On or about June 3, 2013, Mapna
a variant, such as ‘‘know,’’ ‘‘reason to know,’’ or issued a purchase order to the Respondents
bought lithium batteries from the United
‘‘reason to believe’’) includes not only positive stating that the items were to be delivered by
knowledge that the circumstance exists or is States through the same Dutch intermediary
vessel to Iran and that the Respondents
substantially certain to occur, but also an awareness company and then sold, transferred and/or
should provide a certification of origin
of a high probability of its existence or future forwarded the batteries to an end user in Iran.
confirming the items were of U.S.-origin,
occurrence. Such awareness is inferred from The lithium batteries were subject to the
evidence of the conscious disregard of facts known
certified by the local chamber of commerce.
Regulations and the ITSR and were valued in
to a person and is also inferred from a person’s After the Dutch company placed a
total at $75,000. In or about January 2012, the
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willful avoidance of facts. Respondents had asked the Dutch company
4 ‘‘EAR99’’ is a designation for items subject to 6 Also known as National Iranian Oil Company or
to provide a quote for six orders of 1,000
the Regulations but not listed on the Commerce ‘‘NIOC.’’ NIOC was designated a Specially
batteries which the Respondents’ customer
Control List. 15 CFR 734.3(c). Designated National (‘‘SDN’’) by OFAC on
5 31 CFR part 560 (2012–2013). The ITSR had tested and sought for a pending project December 4, 2008, but was removed from the SDN
formerly were known as the Iranian Transactions in Iran. After receiving pricing information List on January 16, 2016, as part of the Joint
Regulations (‘‘ITR’’). On October 22, 2012, OFAC from the Dutch company, the Respondents Comprehensive Plan of Action (‘‘JCPOA’’).
renamed the ITR as the ITSR and reissued them in bought or ordered the 1,000 lithium batteries 7 Also known as the National Iranian Drilling

relevant part. See 77 FR 64664 (Oct. 22, 2012). on or about July 15, 2012, which was Company or ‘‘NIDC.’’

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61542 Federal Register / Vol. 82, No. 248 / Thursday, December 28, 2017 / Notices

corresponding order with a U.S. supplier at Executive Tower, Business Bay, Dubai, origin, that is owned, possessed or
the Respondents’ request, the zirconia United Arab Emirates, and when acting controlled by a Denied Person if such
crucibles were exported from the United for or on their behalf, their successors, service involves the use of any item
States to the Netherlands on or about August assigns, directors, officers, employees, subject to the Regulations that has been
20, 2013. The Dutch company transshipped
the items to the UAE on or about September representatives, or agents (each a or will be exported from the United
17, 2013. An email dated on or about October ‘‘Denied Person’’ and collectively the States. For purposes of this paragraph,
5, 2013, from Charkhian to a customs broker ‘‘Denied Persons’’), may not, directly or servicing means installation,
indicated that the Respondents had indirectly, participate in any way in any maintenance, repair, modification or
forwarded or transferred the items for transaction involving any commodity, testing.
delivery to Iran. software or technology (hereinafter THIRD, that, after notice and
7. In so doing, the Respondents committed collectively referred to as ‘‘item’’) opportunity for comment as provided in
three (3) violations of Section 764.2(e) of the exported or to be exported from the Section 766.23 of the Regulations, any
Regulations and are jointly and severally person, firm, corporation, or business
liable for those violations.
United States that is subject to the
Regulations, or in any other activity organization related to a Denied Person
As to Charkhian only: subject to the Regulations, including, by affiliation, ownership, control, or
Charge 4 15 CFR 764.2(g)—False or but not limited to: position of responsibility in the conduct
Misleading Statement A. Applying for, obtaining, or using of trade or related services may also be
any license, license exception, or export made subject to the provisions of the
8. On or about December 16, 2014, control document; Order.
Charkhian made a false or misleading B. Carrying on negotiations FOURTH, all licenses issued pursuant
statement to BIS and other U.S. Government concerning, or ordering, buying, to the Act or Regulations in which any
officials in connection with an action subject receiving, using, selling, delivering, of the Respondents had an interest as of
to the Regulations and/or in connection with storing, disposing of, forwarding, the date of this Order are revoked.
effecting an export, reexport or other activity transporting, financing, or otherwise FIFTH, Respondents shall not take
subject to the Regulations. While being any action or make or permit to be made
interviewed by BIS on that date as part of a
servicing in any way, any transaction
involving any item exported or to be any public statement, directly or
post-shipment verification (unrelated to
Charges 1–3 above), Charkhian represented exported from the United States that is indirectly, denying the allegations in the
that he had never conducted any business subject to the Regulations, or engaging Charging Letter or the Order. The
with Iran at any time since 2001, and had not in any other activity subject to the foregoing does not affect Respondents’
purchased anything from the United States Regulations; or testimonial obligations in any
during that time period. These statements C. Benefitting in any way from any proceeding, nor does it affect its right to
contradicted the transactions and related transaction involving any item exported take legal or factual positions in civil
transaction documents and correspondence or to be exported from the United States litigation or other civil proceedings in
detailed in Charges 1–3 above, which clearly which the U.S. Department of
indicate that at least on three occasions
that is subject to the Regulations, or
from any other activity subject to the Commerce is not a party.
during 2012–2013, Charkhian and his SIXTH, that the Charging Letter, the
company, Caspian, knowingly procured Regulations.
items from the United States or of U.S.-origin SECOND, that no person may, directly Settlement Agreement, and this Order
for Iranian customers through an or indirectly, do any of the following: shall be made available to the public.
intermediary party in the Netherlands. A. Export or reexport to or on behalf SEVENTH, that this Order shall be
9. Pursuant to Section 764.2(g) of the of a Denied Person any item subject to served on Respondents, and shall be
Regulations, no person may make any false the Regulations; published in the Federal Register.
or misleading representation or statement, or B. Take any action that facilitates the This Order, which constitutes the
falsify or conceal any material fact, either acquisition or attempted acquisition by final agency action in this matter, is
directly or indirectly to BIS or any official of effective immediately.
any other U.S. Government agency in
a Denied Person of the ownership,
connection with an action subject to the possession, or control of any item Issued this 21st day of December, 2017.
Regulations as set forth in (g)(1)(i) or in subject to the Regulations that has been Richard R. Majauskas,
connection with effecting an export, reexport or will be exported from the United Deputy Assistant Secretary of Commerce for
or other activity subject to the Regulations as States, including financing or other Export Enforcement performing the non-
set forth in (g)(1)(iii). support activities related to a exclusive functions and duties of the
10. In so doing, Charkhian committed one transaction whereby a Denied Person Assistant Secretary of Commerce for Export
(1) violation of Section 764.2(g) of the acquires or attempts to acquire such Enforcement.
Regulations. [FR Doc. 2017–28112 Filed 12–27–17; 8:45 am]
ownership, possession or control;
Whereas, BIS and Respondents have C. Take any action to acquire from or BILLING CODE P
entered into a Settlement Agreement to facilitate the acquisition or attempted
pursuant to Section 766.18(b) of the acquisition from a Denied Person of any
Regulations, whereby they agreed to item subject to the Regulations that has DEPARTMENT OF COMMERCE
settle this matter in accordance with the been exported from the United States;
terms and conditions set forth therein; D. Obtain from a Denied Person in the National Oceanic and Atmospheric
and United States any item subject to the Administration
Whereas, I have approved of the terms Regulations with knowledge or reason Availability of Final Evaluation
of such Settlement Agreement; it is to know that the item will be, or is Findings of State Coastal Programs
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therefore ordered: intended to be, exported from the and National Estuarine Research
FIRST, that for a period of twelve (12) United States; or Reserves
years from the date of this Order, Saeid E. Engage in any transaction to service
Yahya Charkhian, with a last known any item subject to the Regulations that AGENCY: Office for Coastal Management
address of Villa 5, Street 1, Arabian has been or will be exported from the (OCM), National Ocean Service (NOS),
Ranches, Dubai, United Arab Emirates, United States and which is owned, National Oceanic and Atmospheric
and Caspian Industrial Machinery possessed or controlled by a Denied Administration (NOAA), Department of
Supply LLC, No. 2509 Churchill Person, or service any item, of whatever Commerce (DOC).

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Document Created: 2017-12-28 00:44:18
Document Modified: 2017-12-28 00:44:18
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
FR Citation		82 FR 61540
DEPARTMENT OF COMMERCEBureau of Industry and Security

Federal Register Volume 82, Issue 248 (December 28, 2017)

DEPARTMENT OF COMMERCE
Bureau of Industry and Security
